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CHINA must deliver a genuine high degree of autonomy for Hong Kong after 1997 if it wants continued United States support for the territory's membership of international trade and policy bodies, the US Consul-General warned yesterday.

Richard Mueller said the US would 'have no choice but to discontinue that type of co-operation or that type of agreement' with the territory if Beijing reneged on the promised self-rule for Hong Kong.

That could mean Hong Kong loses its seat on key organisations like the World Trade Organisation and the Asia-Pacific Economic Co-operation forum.

'It's a fact, it's not a threat,' said Mr Mueller in a speech to the Foreign Correspondents' Club.

He said Americans were becoming more concerned about Hong Kong's transition to Chinese rule.

If it went well, it would have a positive impact on the US public's opinion of China, he said.

The remarks came as a pro-China magazine demanded 'concrete action' from Britain on various fronts to show its sincerity in achieving a smooth transition.

 In a commentary, the Bauhinia Monthly said Britain should hand over both the 'sovereignty and administration' of the territory to China, and stop creating obstacles.

 London should actively co-operate with Beijing on the handover of files on senior government officials and handover of assets, and lift restrictions on civil servants contacting Chinese officials and the Preliminary Working Committee.

 No legal changes including the bill to set up the Court of Final Appeal should be made without China's consent, the magazine said.

 It urged the Government to discuss its reclamation and sewage plans with China.

 In his speech, Mr Mueller underscored the need to preserve intact conditions that made the territory tick.

 These included:   The continuation of a high degree of autonomy, stability and prosperity;   A free market system, including the free flow of capital;   A favourable environment for business: low taxes, a duty-free port, minimal regulation and predictable enforcement of contracts;   The rule of law plus protection of civil liberties and human rights;   The continued development of open, accountable and democratic institutions; and,   Continued co-operation between Hong Kong and foreign law enforcement agencies.

 'The US Government is watching carefully developments on all these fronts,' Mr Mueller said.

 If the transition went well, he said, it would have a positive impact on the US public's opinion of China.

 'The US will continue to support Hong Kong's participation in the World Trade Organisation, APEC, and other such international institutions, as well as maintain bilateral agreements such as civil aviation and extradition. But in order to do so, Hong Kong after 1997 must be allowed to retain a genuine degree of autonomy.

 'Hong Kong's leaders and institutions must make their own decisions; this, after all, is a central thesis of the Basic Law.'  British Foreign Secretary Douglas Hurd underlined the paramount importance of a high degree of autonomy for Hong Kong after 1997 when he met Chinese Vice-Premier Qian Qichen in New York last month.

 Mr Mueller's address, seen as Washington's policy statement on Hong Kong, is likely to offend China, which has warned against foreign meddling.

 Mr Mueller said the US did not want to tell Britain and China how to handle the transfer of sovereignty, but sought 'to co-operate with both sovereigns to do what we can to help Hong Kong maintain the conditions which have made it one of our best international friends and trading partners.

 'The ties between Hong Kong and the US are not only those of money, or of successful business. They are human ties, ties of culture, ties of education, ties of blood.'  He said Washington was negotiating a range of treaties with Hong Kong on matters such as extradition, legal assistance and air services, and wanted to reach a full bilateral investment treaty with the territory.

Mr Mueller said it was crucial that the Court of Final Appeal be set up before 1997 to maintain confidence and avoid a legal vacuum.



Self-rule must last handover, says US